Housing

UNITED STATES: Latest research shows that rental affordability is worsening

Research shows that tenants in the United States are spending around £2,000 more a year of their income on rent as affordability worsens.

People renting a home are paying out of their income 29.1% on average, compared to the 25.8% they were paying prior to the housing bubble that burst back in 2007.

However in comparison, homeowners are spending less of their income than they did previously. Saving approximately $3,300 per year on housing payments, according to the real estate firm Zillow.

Their research shows that mortgage payments make up a smaller portion of income at around 15.4% in the third quarter of 2017. This is compared to 21% previously.

Even worse for those living in expensive markets such as San Jose where renters are paying up to 39% of their income as compared historically to 26%. For some this means $13,525 more this year. San Francisco renters are experiencing a similar affect spending $11,236 more this year.

Even though rental affordability has worsened in most metro US Cities, cities such as Pittsburgh have remained consistent over the past several years which allows income to keep pace with rent appreciation or even exceed in some instances.

Compared to pre bubble years however, metro renters are spending a smaller portion of their income, approximately $3,400, less per year, than historically.